Calgary's boom: Not all boats are rising

Another Mercedes-Benz SLR McLaren rolls out of the auto dealer showroom, joining a virtual river of luxury cars and giant SUVs flowing down Deerfoot Trail. This half-million-dollar machine is symbolic of a new bravado in Calgary. The city is sloshing with money and people are not afraid to spend it. The booming oil and gas industries -- along with the hefty wage increases, bonuses and stock options -- are propelling Cowtown into an era of decadent, opulent wealth.

Restaurants and bars on the now-famous Red Mile strip of 17th Avenue are teeming with the New Rich. Credit cards and corporate expense accounts chase after expensive scotch and $40 seared ahi tuna. Promotional signs advertising one-bedroom condo units "starting in the $250s" are covered over with SOLD OUT banners. Everywhere you look in Calgary, there is evidence of nearly unbridled consumerism.

Everywhere, that is, except The Mustard Seed, a non-profit Christian humanitarian organization that provides meals and services for Calgary's homeless. The Mustard Seed sits in the heart of the Beltline-Victoria Park neighbourhood, just south of the bustling downtown core.

Here lies the dark reality of Calgary's other growth segment -- the working poor, the homeless, the addicted, the mentally ill.

And it seems for every $12 lychee martini sold at the stylish Bungalow bar, another person joins the lineup for the free lunch at the soup kitchen. There is a cruel and vivid contrast, evident to those who bother to look, between the lineup at Cowboys nightclub and the lineup at The Mustard Seed.

Calgary is not unique; Toronto and Vancouver have long struggled with much larger problems of poverty and homelessness. Perhaps Calgary is simply experiencing the pains of growing into a city of one million.

But what does make Calgary's homelessness issue notable is the sharp cleavage between the two rapidly growing segments of the population -- the young, rich, affluent Calgarians, and the poor, addicted, and homeless Calgarians. The former often seems oblivious to the latter's existence. In survey after survey, the No. 1 concern of Calgarians is transportation -- that is, not enough freeway space to accommodate their Hummers.

A census of the homeless in 2004 showed that the population living on Calgary streets was nearly 2,600 -- almost all of these within the downtown core and Beltline-Victoria Park neighbourhood. That is an increase of 65 per cent since 2000 -- far outpacing Calgary's overall population growth of 8.5 per cent during the same period. The city's homeless are concentrated in an area of about 80 square blocks.

Economists like to talk about how good economic times will benefit everyone. In theory, a rising tide raises all boats. Clearly the theory is failing us here in Calgary.

Laying blame for the problem of homelessness in the country's wealthiest province is a favourite pastime of many social commentators in Alberta. More often than not, the provincial government is the target. Fingers are pointed at the cuts Premier Ralph Klein made in the 1990s to welfare, social programs, assistance for the severely handicapped, and low-cost housing. But the problem is far more complex. Certainly the cuts were painful for those reliant on those programs. But blaming cuts the government made a decade ago does not fully explain the swelling numbers of street people today.

Besides, programs have since been enriched somewhat, and two major homeless shelters in the downtown core have gone up in the past few years. And yet the number of people living on the street seems to double every year. It is almost as if enriching programs for the poor is making the problem worse. How can one explain this paradox?

The problem is not just economic. Poverty is not solely a result of insufficient job opportunities. Currently in Calgary, there is a severe labour shortage -- and the shortage is not restricted to highly trained workers. There is a shortage of labour for just about any position you can name -- from dishwasher to truck driver to pizza delivery dude. Even Tim Hortons cannot find enough workers.

And yet I cannot walk out of the Tim's in my downtown neighbourhood, clutching my extra-large double-double, without being approached by a shivering soul asking (usually quite politely) for a bit of change. The social welfare organizations implore us to not give money to panhandlers, suggesting we give directly to their organizations, instead. I understand the logic in this, but it still makes my heart break to say "Sorry, man, I've got nothing." Sometimes I slip them a toonie anyway, hoping none of the social advocates catch me.

I am an economist, not an expert in the social problems surrounding homelessness. But I do know that the situation is made worse by drug and gambling addictions, mental health issues, prostitution, and domestic violence. These are not problems economists are particularly skilled at solving.

Calgary is booming and its citizens are enjoying good times. For the most part, we are hard working, ambitious and deserving of our wages. We are generous, too, both with our money and our volunteer time. Calgarians give an average of $1,908 per year in charitable donations, compared to $1,197 nationally (2004 figures). The average Calgary volunteer contributes 127 hours per year in volunteer time, the equivalent of 16 days of work. Thirty-nine per cent of Albertans volunteer in some way, compared to 27 per cent nationally.

Even though it is unlike an economist to ever say so, I don't think there is an easy solution. There are certainly things that will help, such as giving generously to The Mustard Seed and other worthwhile organizations. And awareness on the part of Calgarians and our civic leaders is critical. But there is no silver bullet. No matter how high this current energy boom raises many of our boats, some of Calgary's least fortunate continue to sink.

Todd Hirsch, chief economist with the Canada West Foundation, lives, works and plays in Calgary's Beltline-Victoria Park neighbourhood. The views in this column are his own.